Follow Up Investigation on FalconSwap & TrustSwap (Deeper Scam ring?)

By LiteLiger | LiteLiger Blog | 9 Feb 2021

Can we really Trust these Projects?

Last year I had two preliminary investigations on Falconswap and Trustswap which gained a lot of frontpage attention and debating on legitimacy around these projects. These previous videos of mine get sometimes messages asking for updates, my current thoughts, etc. regarding these two projects and my views haven't changed too drastically, but I will be sharing information on some of the news that has been discovered since starting with TrustSwap. 


Where Does Trust originate from really? 

Now this whole initial issue with TrustSwap and the investigation that lead into them had a lot to do with the irresponsible management and leadership, which mostly revolved around CEO Jeff Kirdeikis ( he has blocked me on Twitter). The way he handled HatchDAO was messy and promises were broken and false statements were found. On top of this he did endorse a bunch of projects on the TrustSwap website such as UniLayer and Unitrade which I already previously investigated and exposed.  

  • The initial projects endorsed on the website can be viewed on the original video, but the new website overhaul has none.
  • The original team is the same with a couple of new additions since I covered it

Now what was uncovered after initial investigation is that Jeff Kirdeikis owned (still owns far as I know) three different Facebook groups which were used by him to pump and dump certain projects, there were prominent influencers aboard on these groups (Boxmining was mentioned for instance). Usually when you run a project which supposedly should be built on trust, you probably don't want to be running PnD groups at the same time? 

Fellow investigator went to these groups and got accepted, but was kicked out pretty fast when he started to ask questions regarding if Jeff is the owner of these groups.


Here is an example of Jeff endorsing a project that did an exit scam called Axion Network. There are probably lot more other scams he did end up endorsing through this Facebook group and he did indeed brag for making lot of money through these groups (I guess endorsed shills etc.) Now was Jeff in cahoots with Axion and similar scam projects from day 1 is still unknown. 


Another concern that was raised by many people was that how inactive Jeff has been at this other project Uptrennd (1UP) which has been basically abandoned by Jeff and development seems super slow. Usually one would expect commitment from people to stay to these projects before jumping into new ones, which always begs the question why did Jeff decide (Again...) to create a new project in such a short timespan. 


When people bounce from one project to another that's generally to me a massive red signal and that doesn't build trust, we saw this with Adrian's investigation. How long till jeff is gonna jump into the next project and leave the other? 

  • To be clear lot of my previous critique has been about the team and jeff mostly. If leadership is poor projects only can go so far, he spent lot of money obviously getting people to make vids about TrustSwap, however this is not longterm sustainable to grow a project. 

So code part may check all good, even though there were really sketchy delays with the audit firm and i thought that was really odd and how they handled themselves.


Dead Falcon Spotted! Doubling Down...

Now the sad part about how Falconswap received the initial investigation was poor. They kept doubling down on the lie about the investors and logo, even though i had recorded all that data and shown to people why it's fake news. Even though the evidence was put through regarding Falconswap many people still kept believing in the project....

  • First of all the release of the DEX was vastly delayed from its initial roadmap dates as shown on my original video 
  • They started a new project called Falconpools which serves as L2 Launchpad basically
  • Github is still empty and has no data regarding the code. 

Now they received an audit by which actually audited Pamp Network and gave it green colors even though it had a mint function that basically allowed them to do a sweet exit scam. So this audit firm has zero credibility in my eyes, especially because its Chinese origin. I mean what kinda fucking audit is only 3 pages, where one page takes a whole logo? 


Now the developers still want to be anon and don't seem to have any willingness to release the code - which btw this audit barely talks about since there are no references to lines of codes? The GitHub linked in the PDF is actually 404 so it doesn't lead anywhere...

After I asked them about the short audit page i was banned from the FalconSwap group, which just shows that they have no intention of being honest about the matter at all.


The major trap about this project really comes down to "Trust" which is really hard to give to any project right now which has been associated with jeff kirdeikis but also which is Anon team. What people don't understand is that layer 2's are controlled by the projects, there are no decentralized nodes or decentralized mechanism to prevent a liquidity withdrawal by the Falconswap team.

  • People seem not to understand that layer 2 is just syncing with ethereum to extent, but its not actually living under Ethereum blockchain, so all benefits of decentralization and nodes that Ethereum has are not present on layer 2 solution.

This also raises the question of possible economic attacks that the layer 2 may receive and what parts can be exploited on a code that was poorly audited by a fifth-rate audit company. Falconswap's bridge has zero reason be trusted especially because if they exit there are no one to blame, since they used 3rd party to register their initial domain to hide their identity from law enforcement. 

Ultimate Question is - Why invest in Falconswap? When you have non-anonymous teams with the working projects and multiple audits that can be trusted? With a decentralized mechanism to built trust between the L2 mechanism and the community? It just doesn't make sense to me... 


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